Nvidia has posted record revenue as artificial intelligence demand surges, even while international tensions threaten its growth.
On Wednesday, the Santa Clara-based chipmaker reported $46.7bn (£34.6bn) in second-quarter revenue, a 56% increase compared with the same period in 2024.
Despite the strong performance, shares fell in after-hours trading after executives admitted the company was still “working through geopolitical issues.” Nvidia remains caught in the escalating trade conflict between Washington and Beijing.
Policy changes under the Trump administration, aimed at maintaining US dominance in artificial intelligence, add further uncertainty for the company.
AI demand drives record sales
Nvidia’s chips have become central to the global AI revolution.
The company reported strong demand from major technology firms, including Meta, owner of Instagram, and OpenAI, creator of ChatGPT. Both are rapidly expanding their AI systems.
“The AI race is now on,” said Nvidia chief Jensen Huang in a call with analysts. He revealed that four leading tech companies had doubled annual spending to $600bn.
“Artificial intelligence will accelerate GDP growth over time,” Huang added. “We are building the infrastructure to make that possible.”
Analysts note Nvidia’s dominant market position. Colleen McHugh, chief investment officer at Wealthify, described the company as “the driving force behind the AI boom.”
She emphasized Nvidia’s reliance on continuous investment from tech giants. If that spending continues, she said, revenue and share prices should keep rising.
Revenue from data centres jumped 56% to $41.1bn but slightly missed analyst expectations. Investor Eileen Burbridge, founding partner of Passion Capital, said this weaker performance caused the “share price wobble.”
Even so, she described Nvidia’s growth as “unbelievable” but warned that excessive enthusiasm could create a bubble.
In July, Nvidia became the first company in the world valued at $4trn. The firm now forecasts $54bn in revenue for the current quarter, exceeding Wall Street predictions.
Geopolitical tensions cloud outlook
Despite record earnings, Nvidia faces growing political risks.
In July, the company announced plans to resume sales of its high-end AI chips to China. The decision followed lobbying from Huang, who persuaded the Trump administration to lift its ban on the H20 chip, designed for Chinese clients.
The ban had been introduced amid fears the technology could benefit China’s military and domestic AI sector.
Executives confirmed that by late July, US officials began reviewing licenses for H20 sales. Some Chinese companies received approvals, but Nvidia has not shipped the chips.
The US government expects to collect 15% of revenue from licensed H20 transactions. Nvidia excluded the H20 from its forecast and continues lobbying for approval to sell its Blackwell chips in China, the world’s largest chip market.
Meanwhile, Beijing is intensifying efforts to build its own semiconductor industry. “US export restrictions are fuelling Chinese chipmaking,” said Emarketer analyst Jacob Bourne.
He added that Nvidia’s ability to remain “the bellwether of the AI economy” may depend on whether its robotics expansion secures long-term leadership.
